State owned liquor stores in Quebec slashes prices to stop consumers cross-border shopping in Ontario

  A price war has broken out in Canada between Quebec’s state owned alcohol retailer the Société des alcools du Québec  (SAQ), and the Liquor Control Board of Ontario (LCBO) for the wallets of Quebec’s cross border shoppers.

The SAQ has recently announced that it is slashing its prices to enable it to compete more successfully with the LCBO and is knocking 50 cents off the cost of its 1,600 wines, which represent around 80% of the wine it sells.  

This is in an attempt to persuade local wine drinkers to buy their alcohol at home, rather than crossing the border into Ontario where historically it has been cheaper. Most cross border shoppers are buying wine by the case, and saving themselves hundreds of dollars in the process.  

The differences in wine prices are largely down to taxation, although it appears that LCBO buyers are better at negotiating prices from suppliers than their SAQ counterparts.  

The LCBO which are the only retail outlets licensed to sell alcohol in Ontario and has a virtual  virtual monopoly on alcohol sales in what is Canada’s most populous province, which is home to almost 40% of the nation’s entire population, and as a result is one of the world’s largest buyers of alcoholic drinks.    

 This is the first step in a plan to lower wine prices to match the LCBO. Other recent changes in Quebec  include the sale of beer, and soon wine, in selected grocery stores.  

  To cater to cross border shoppers, the LCBO has built big stores at strategic points on the border, especially Cornwall and Hawkesbury.   And while wine prices are now falling in Quebec, they are going up in Ontario. The minimum price for a bottle of wine in an Ontario supermarket is currently $10.95 a bottle. But in the Ontario budget, the minimum price at the LCBO was raised to $7.95, which will likely have a knock on effect on wines at all price points.